Financial Tips to Start the New Year Smartly

It may not seem as exciting to review your finances at the beginning of the year as it might be to make other resolutions, like upping your physical or mental activity, eating better, or reducing stress, but it's crucial to keep in mind that your financial wellness and your physical and mental well-being are frequently closely related.

The good news is that you may find it easier than you believe to improve your financial situation. These six easy steps will help position you for financial success in 2024 and beyond.

Examine Your Family's Budget Again

Review your budget at the beginning of the year. To create the best budget for you, evaluate your typical monthly income, your fixed and variable costs, and your financial objectives for 2024.

Since households must continue to allocate more for necessities like food and petrol due to the persistently high rate of inflation, reevaluating your budget may be especially beneficial at this time.

Review Your Emergency Savings

Ensuring sufficient savings for unexpected situations is advisable, especially during economic slowdowns. In 2023, there was an unforeseen surge in economic development, with the GDP growing at a strong 4.9% seasonally and inflation-adjusted annual growth rate in Q3. Nevertheless, the Morgan Stanley Research economics team predicts a growth stall, projecting a 1.9% yearly decline in U.S. GDP growth for 2024.

An emergency fund can help you stay afloat financially in unanticipated life situations, such as a change in your or a loved one's job position. This is especially true in an uncertain economy. As a basic guideline, an emergency fund should be.

Take Care of Your Debt

Even if you already manage your debt well, you might still want to take action to further consolidate and reduce it. You might want to apply any additional income, such as a raise or year-end bonus, to any high-interest accounts.

Next, consider consolidating any outstanding debt to potentially get a cheaper interest rate on a single loan by doing away with variable interest rates on several credit cards, loans, or credit lines. You may also lessen financial stress and simplify your financial life by carrying fewer loans. You might wish to discuss potential tactics with your financial advisor.

Are you having problems getting going? With the financial management tools offered by Morgan Stanley on Morgan Stanley Online, you can keep tabs on your earnings and outlays and make personalized budgets to make the most of your financial resources.

Make Sure You're on Track with Your Goals

Make careful to assess your progress toward your objectives, such as investing in and saving for a happy retirement. In case you've been momentarily deviated from your intended route due to market fluctuations or other circumstances, consult your Financial Advisor to determine the best course of action.